Transfers: Payee? Category?

Rusty Dockery

This is a Bookkeeping 101 question but after years of using Quicken to sort expenses I'm trying to expand my use and knowledge. When I transfer say from Cadence Bank to Ally Bank, how should the transaction appear in the ALLY register? Seems it should be the Cadence account as Payee and Ally Bank in the Category. But I get a message that I'm going back into the same account.

bmciance

The category in the Ally register should be Cadence.  

Chris_QPW

The key is the category.  Quicken uses "reuses" the category field to allow for transfers without having a separate transfer field (and for the fact that you can only have either a transfer or a category, not both).

The syntax for a transfer is [Other Account].  So, if I'm in the account "Checking" and want to transfer money to account "Savings" the category field in the Checking account transaction would be [Savings].

This will create a linked transfer between the Checking and Savings account.  That will appear in the Savings account as a transaction with the category field set to [Checking].

This is what Quicken considers a "Transfer" and will be reported as such in things like reports.  It also allows for a person to right click on that transaction and select "Goto matching transfer", which will take it to the linked transaction in the other account.

And to get even more "creative" with this field/syntax they decided to use it for a "balance adjustment".
Say I'm in the account Checking, and I want to create an opening balance or if for some other reason I want money to come into or out of the account without affecting any category or other account I can set the category to [Checking].  This is what the warning message you are getting means.  You are "transferring" the amount from/to the same account.  This isn't something that people normally do (make a balance adjustment), and so they warn you.  But it is the proper way to do this if a balance adjustment is needed.  But it isn't correct if the intent was to transfer the money to another account.

Now back to bookkeeping 101, as in a double book system.  Clearly when the double book system was created there was no possibility to do it with a "linked transfer" like a computer program can do today.

So, that system is based on having offsetting "categories", and there is nothing wrong with that expect that Quicken really expects the linked transfers.  But in fact, there are cases where the linked transfers cause problems.  If one needs to resort to exporting their data in QIF format and importing it back in, all those linked transfers have to be found and matched and recreated.  Quicken has always done a terrible job of this.  So, much in fact that when I tried to do this, I could never get it to work correctly and resorted to changing all the linked transfers to normal categories so that I could do a QIF import of all my data.

bmciance

Rusty Dockery said:

So ... If I'm in the recipient register (Ally Bank), the Payee AND the Category will be Cadence. But Cadence in the Payee field is just a descriptor while the Cadence in the Category is a specific account, e.g., Cadence Joint?

Yes, that is correct.  Description is just that, a description.

Rusty Dockery said:

Now, I'm puzzled about the transferor register, Cadence. Here Payee will be Ally (where the money is going and the Category is [Cadence specific account] the source?

In the Cadence register the category will be [Ally] because that is the other account in the transfer.  The transfer is going between Cadence and Ally so in each you would have the other account as the category in square brackets.

bmciance

The category in the Ally register should be Cadence.  

Chris_QPW

The key is the category.  Quicken uses "reuses" the category field to allow for transfers without having a separate transfer field (and for the fact that you can only have either a transfer or a category, not both).

The syntax for a transfer is [Other Account].  So, if I'm in the account "Checking" and want to transfer money to account "Savings" the category field in the Checking account transaction would be [Savings].

This will create a linked transfer between the Checking and Savings account.  That will appear in the Savings account as a transaction with the category field set to [Checking].

This is what Quicken considers a "Transfer" and will be reported as such in things like reports.  It also allows for a person to right click on that transaction and select "Goto matching transfer", which will take it to the linked transaction in the other account.

And to get even more "creative" with this field/syntax they decided to use it for a "balance adjustment".
Say I'm in the account Checking, and I want to create an opening balance or if for some other reason I want money to come into or out of the account without affecting any category or other account I can set the category to [Checking].  This is what the warning message you are getting means.  You are "transferring" the amount from/to the same account.  This isn't something that people normally do (make a balance adjustment), and so they warn you.  But it is the proper way to do this if a balance adjustment is needed.  But it isn't correct if the intent was to transfer the money to another account.

Now back to bookkeeping 101, as in a double book system.  Clearly when the double book system was created there was no possibility to do it with a "linked transfer" like a computer program can do today.

So, that system is based on having offsetting "categories", and there is nothing wrong with that expect that Quicken really expects the linked transfers.  But in fact, there are cases where the linked transfers cause problems.  If one needs to resort to exporting their data in QIF format and importing it back in, all those linked transfers have to be found and matched and recreated.  Quicken has always done a terrible job of this.  So, much in fact that when I tried to do this, I could never get it to work correctly and resorted to changing all the linked transfers to normal categories so that I could do a QIF import of all my data.

Rusty Dockery

So ... If I'm in the recipient register (Ally Bank), the Payee AND the Category will be Cadence. But Cadence in the Payee field is just a descriptor while the Cadence in the Category is a specific account, e.g., Cadence Joint?

Now, I'm puzzled about the transferor register, Cadence. Here Payee will be Ally (where the money is going and the Category is [Cadence specific account] the source?

bmciance

Rusty Dockery said:

So ... If I'm in the recipient register (Ally Bank), the Payee AND the Category will be Cadence. But Cadence in the Payee field is just a descriptor while the Cadence in the Category is a specific account, e.g., Cadence Joint?

Yes, that is correct.  Description is just that, a description.

Rusty Dockery said:

Now, I'm puzzled about the transferor register, Cadence. Here Payee will be Ally (where the money is going and the Category is [Cadence specific account] the source?

In the Cadence register the category will be [Ally] because that is the other account in the transfer.  The transfer is going between Cadence and Ally so in each you would have the other account as the category in square brackets.

Rusty Dockery

Thanks, Guys! Now to clean this up, lol :-)

Harv

Once two accounts are transfer linked why doesn't a change to 1st register show up in other account.

e.g if I make a change to credit card account like if adding a note to the credit card register it does not show up in the checking account that is linked and I have to add the some note there for them to match.

Chris_QPW

Harv said:

Once two accounts are transfer linked why doesn't a change to 1st register show up in other account.

e.g if I make a change to credit card account like if adding a note to the credit card register it does not show up in the checking account that is linked and I have to add the some note there for them to match.

Because it isn't designed to work that way.  You might want the two transactions to be identical, but others don't.  The only parts of the transaction that are kept in sync once it is created is the date and the amount.

"Linked" doesn't really imply "identical".  They are two separate transactions.